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OPINION

How to do good with your money

How to do good with your money
October 16, 2014
How to do good with your money

Figures from the Investment Management Association (IMA) show ethical funds' share of the industry's £823bn total funds under management was just 1.2 per cent at the end of August 2014. This is the same percentage as last year - still way short of any decisive breakthrough into the mainstream.

And so this weekend the ethical investment industry's annual effort to raise its profile has been rebranded "Good Money Week".

Jamie Hartzell is the founder and managing director of Ethex, an online platform for positive investing. He says: "The ethical label seems mildly judgmental. It implies that you have to conform to a set of standards set by someone else." Policies vary from fund to fund. And financial advisers are reporting that their clients are starting to move away from the traditional negative screening criteria introduced in the 1980s - screening out tobacco stocks, for example - towards investments that take a more positive stance.

John Ditchfield is a director at Barchester Green Investment, an independent financial advice firm that specialises in ethical investment. He says: "There are still investors out there who will want some negative screening. But more often people want to see the positive effects of investing."

This has led him to concentrate on recommending funds that have an emphasis on business sustainability. He recommends the FP WHEB Sustainability Fund (GB00B8HPRW47), Impax Environmental Markets (IEM) - which is also an IC Top 100 Fund - Jupiter Ecology (GB0005812150) and Quilter Cheviot Climate Assets.

But funds are not the only option. Via the Ethex platform investors can invest directly in unlisted businesses that are solving social and environmental problems, as well as offering a good return. Since it launched in February 2013 more than 1,000 people have opened an account, investing nearly £6m in over 30 positive businesses. Mr Hartzell says: "Investors want to see a clean, sharp, immediate social benefit."

Sam Daws, aged 49, is a former aide to UN Secretary General Kofi Annan and has invested through Ethex. He says: "I've always wanted the money I invest to reflect my values. So I look for opportunities that foster a sense of community, with a particular focus on combating climate change. But I'm open to anything that offers both a financial and environmental or social return - from projects that help ex-offenders back to work to those that support the homeless."

Under the new crowdfunding regulations, investors can only put 10 per cent of their portfolio with Ethex investments, which seems a sensible limit.

www.ethex.org.uk

www.barchestergreen.co.uk

goodmoneyweek.com